Courtroom dramas, FCA probes, star exits and a big fund launch captured the headlines in the first half of 2014.

The 20 stories which dominated the headlines in H1

If wealth managers thought the FCA may take its foot off the pedal after an intensive couple of years bearing down on the sector, they were wrong. The watchdog marked the start of the year with the creation of a dedicated wealth management division.

However, it was perhaps a little comforting that the FCA turned to former Wealth Manager cover star Kleinwort Benson chief executive Robert Taylor (pictured) to supervise the sector. His experience in the industry includes spells at Merrill Lynch, SG Hambros and Coutts, gives him a specialist insight into the wealth industry.

'The wealth management sector is hugely important to the UK’s financial services. I’m looking forward to working closely with an industry I know well to ensure that its clients are being well served,' Taylor said in a statement.

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Meanwhile there were big changes at Barclays’ wealth management arm after a major overhaul in 2013, which formed part of chief executive Anthony Jenkins' project to transform the the bank

In this latest development the wealth unit streamlined its regional management structure. The move came on the back of news there would be a 40% reduction in UK headcount and the launch of a new ‘private clients’ division for customers with under £500,000 who would be serviced out of a call centre.

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After a raft of star exits in 2013, the year kicked off with news that Artemis had poached Threadneedle stars Cormac Weldon and Stephen Moore to launch a US equity franchise for the firm.

'The investment records of Cormac (pictured) and Stephen speak for themselves, as does the scale of the assets they manage. So we will all be very pleased to welcome them to Artemis,’ Artemis senior partner Mark Tyndall gushed.

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One of the defining themes of the first half of 2014 was merger & acquisition activity and F&C set the ball rolling by announcing it was in talks with BMO Financial Group, a division of Bank of Montreal.

The pair thrashed out a £708 million deal with F&C changing hands in May. The transaction came after Edward Bramson (pictured) stood down as F&C chairman last year.

On this occasion a number of UBS employees found out their self-invested pension plans (Sipps) had exposure to the Madoff Ponzi scheme. Wealth Manager revealed the story after getting hold of the letter the bank sent to staff.

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And finally it came, the news the investment press had all been eagerly anticipating – which 27 funds made it onto Hargreaves Lansdown’s discounted 150+ fund buy list.

Hargreaves, founded by Peter Hargreaves (left) and Stephen Lansdown (right), chose the early hours of the first Saturday in March to reveal the funds it had struck deals with. The average management charge on these super clean funds 0.54%. High profile funds from the likes of Angus Tulloch, Richard Buxton, Leigh Harrison and Harry Nimmo appeared on the list.

Hargreaves' head of research Mark Dampier said he was pleased with his firm’s effort: 'Our investment team devotes over 30,000 hours a year to researching fund managers to identify the best in the market.

'The core investment principles which underpin our research process ensure that only the best funds make it onto the Wealth 150 and Wealth 150+.'

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As the industry fought valiantly against the growing regulatory burden, out of the blue it was presented with a golden opportunity in the Budget through a shock overhaul to pensions.

In what was dubbed the biggest pension overhaul in living memory, chancellor George Osborne said people would no longer be forced to buy an annuity on retirement.

In a detailed note in the aftermath, Bank of America Merrill Lynch said there is a significant chance a lot of this money could switch to wealth managers.

‘Typically, the default fund of a defined contribution (DC) scheme would be some kind of multi-asset or balanced product. We would guess a typical retiree might consider a less volatile version of one of these,’ the investment bank said.

‘This would reward providers who have high quality multi-asset/risk managed/balanced products as well as strong brands.’

Leave a comment!

One of our biggest stories of the year was news of an impending courtroom battle between two of the largest names in wealth management over the recruitment of a team in Leicester.

The High Court drama between Brewin Dolphin and Charles Stanley featured allegations of a cover up, secret ‘recruiting sergeants’ and clandestine negotiations to prise 18 people from the Leicester office of Brewin over to Charles Stanley.

The nine-point writ, seen by Wealth Manager, alleges that Brewin’s former employees breached their contracts and conspired with Charles Stanley to cause losses to Brewin’s business ‘by unlawful means’.

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There was distress at Coutts in March, as some staff learned their bonuses had been slashed by 40%. Perhaps understandable given this figure is much higher than the 15% fall in bonus payments at its state-owned parent group RBS.

‘RBS has only cut its bonuses by 15%. And for reasons we don’t understand because Coutts is only one of two divisions that made an adequate return on equity, our bonus pool for Coutts as a whole has been cut by 40%,’ an angry internal source told Wealth Manager.

This time Rathbones swooped on Jupiter to seal the £43.5 million purchase of its private client business. Rathbones complemented the buy with the acquisition of the former Tilney London business. Rathbones carried out a £24.4 million placing to help fund the deals.

Rathbones chief executive Philip Howell described the buys as ‘excellent’ fits. ‘They demonstrate the merits of Rathbones to both clients and investment management teams, as well as our ability to capitalise on earnings-enhancing acquisition opportunities to grow our business,’ he said.

Jupiter chief executive Maarten Slendebroek (pictured) added: ‘Our private client operations have been part of Jupiter since the group was founded in 1985. However, the group has evolved to become predominantly a mutual fund provider and we believe it is in the best long term interests of our private clients for them to transfer to Rathbones, a specialist wealth management organisation.’

Leave a comment!

Despite the constant warnings, it became evident that certain unscrupulous firms were willing to test the financial watchdog’s limits.

The FCA, led by Martin Wheatley (pictured) was left peeved indeed after its latest thematic review into adviser charging found a massive 73% of firms were not being clear about the cost of advice.

To add insult to injury the financial watchdog said it could take enforcement action against two firms – one wealth and one advisory – for ‘egregious’ failings.

'I am disappointed with the results of our latest review looking at whether advisers are clear with their customers on costs and services provided,' FCA director of supervision Clive Adamson said in a statement.

Leave a comment!

April saw another headline-grabbing fund manager exit, this time in the shape of L&G manager Dickie Hodges.

The former Citywire AAA-rated manager, who had been at the firm for seven years, ran the £2 billion Dynamic Bond Trust (DBT), was also managing the Fixed Interest, Managed Monthly Income and Sterling Income funds on an interim basis.

The Dynamic Bond Trust was taken on by L&G senior fixed income manager Martin Reeves, while the other three funds will be managed by the UK institutional credit team, led by Robert Barnard-Smith. Hodges will remain employed by L&G until October.

Back in February Wealth Manager revealed the news that Woodford’s new venture was planning an income fund launch and our readers got worked up as they learned exactly how much the star manager would be charging for his new fund.

The annual charges ranged from 0.65% to 1.5% depending on the size of the initial investment.

Woodford Investment Management believes investors are getting a decent deal. ‘We are able to keep our fees low, through the use of modern technology and encouraging investors to use fund platforms, execution-only brokers and financial advice channels, rather than buying directly from us,’ commented the firm’s chief executive Craig Newman.

At the end of June it was revealed the fund had taken in a record £1.6 billion during its offer period.

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Brewin dominated the headlines in May in what proved to be a busy first half for the wealth management business

The firm took the decision to ditch plans to implement the Figaro software package, introduced by former chief Jamie Matheson (pictured), across its wealth management business. The move cost the firm £32 million.

Instead Brewin will upgrade its existing internal systems and stressed that improving its IT strategy remains important to the group.

The board said it believed the decision to cease the roll-out of Figaro was in the best commercial interests of the group. Moreover, it said it remained confident that the 2016 operating margin target could be achieved through on-going business improvements.

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The ultra-competitive UK wealth management market heated up at the start of June on the entry of US wealth giant Meketa Investment Group (MIG).

Boston-based MIG, which was founded in 1978, employs around 100 people and consults on more than $270 billion for over 90 clients. The firm provides general investment consulting and advisory services on a discretionary and non-discretionary basis, with clients ranging from public, corporate, chartiable, insurance and family offices.

'London provides a platform to deepen our existing research coverage outside the Americas,' the firm’s managing principal Stephen McCourt said. 'Meketa Investment Group is well known for the depth and experience of its investment staff. We are pleased to establish a presence in Europe.'

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In June Coutts shocked the industry, after Wealth Manager revealed it was conducting a suitability review dating back to 1957.

The RBS-owned private bank sent a letter out to clients in June saying it would review the suitability of all investment portfolios.

Coutts chief executive Michael Morley told Wealth Manager the trust of Coutts’ clients was its number one priority and explained the ‘review is designed to make sure that suitable advice was given and we put things right when it was not.’

He added: ‘We are proud of our new wealth management advice service and we believe it sets a standard for giving objective advice to clients, based on a comprehensive understanding of their personal assets and liabilities.'

Leave a comment!

As the first half drew to a close the Bristol-based firm went on a hiring spree.

The 10 recruits joined Hargreaves from the likes of St James’s Place and Chase de Vere, and spanned locations including London, Cardiff and Greater Manchester. They will remain in their regions rather than relocating to Bristol.

'Finding and securing the right high-quality individuals is one of the toughest tasks for any business,’ Hargreaves Lansdown’s head of financial planning Danny Cox (pictured) told Wealth Manager, and expressed confidence that the new recruits had ‘all the right skills and knowledge to excel at Hargreaves Lansdown’.

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The funds industry was dealt sad news when it emerged that Citywire A-rated Unicorn star John McClure had passed away.

McClure specialised in UK smaller companies for more than 20 years. He joined Unicorn in the summer of 2000 after spells at Granville, Guinness Flight Global Asset Management, United Friendly Assurance and Hermes Asset Management.

It was on the Unicorn UK Income fund where he really made a name for himself, returning 64.75% in the three years to the end of April, the second best performance out the 99 fund managers with a three-year track record in the UK equity income sector. Over five years he sat at the top of the peer group with a return of 256%.

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While the year started with a regional restructure at Barclays' Wealth & Investment Management arm, the bank closed the first half with news its chief executive Peter Horrell (pictured) was to depart.

Horrell will exit bank at the end of the year, after 23 years of service. He took the reins as chief executive in September 2013, having held the role in an interim basis since April that year, replacing former head Tom Kalaris.

'Pete has had an exceptional career at Barclays over the last 23 years, and most recently he has overseen the creation and implementation of W&IM’s strategy, securing investment in the business from Barclays and positioning W&IM for long-term and sustainable growth,’ Ashok Vaswani, head of personal and corporate banking at Barclays, said

‘It has made great progress on its transformation journey and the underlying business is robust and well positioned for the future.’

Leave a comment!

If wealth managers thought the FCA may take its foot off the pedal after an intensive couple of years bearing down on the sector, they were wrong. The watchdog marked the start of the year with the creation of a dedicated wealth management division.

However, it was perhaps a little comforting that the FCA turned to former Wealth Manager cover star Kleinwort Benson chief executive Robert Taylor (pictured) to supervise the sector. His experience in the industry includes spells at Merrill Lynch, SG Hambros and Coutts, gives him a specialist insight into the wealth industry.

'The wealth management sector is hugely important to the UK’s financial services. I’m looking forward to working closely with an industry I know well to ensure that its clients are being well served,' Taylor said in a statement.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

If wealth managers thought the FCA may take its foot off the pedal after an intensive couple of years bearing down on the sector, they were wrong. The watchdog marked the start of the year with the creation of a dedicated wealth management division.

However, it was perhaps a little comforting that the FCA turned to former Wealth Manager cover star Kleinwort Benson chief executive Robert Taylor (pictured) to supervise the sector. His experience in the industry includes spells at Merrill Lynch, SG Hambros and Coutts, gives him a specialist insight into the wealth industry.

'The wealth management sector is hugely important to the UK’s financial services. I’m looking forward to working closely with an industry I know well to ensure that its clients are being well served,' Taylor said in a statement.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Meanwhile there were big changes at Barclays’ wealth management arm after a major overhaul in 2013, which formed part of chief executive Anthony Jenkins' project to transform the the bank

In this latest development the wealth unit streamlined its regional management structure. The move came on the back of news there would be a 40% reduction in UK headcount and the launch of a new ‘private clients’ division for customers with under £500,000 who would be serviced out of a call centre.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

After a raft of star exits in 2013, the year kicked off with news that Artemis had poached Threadneedle stars Cormac Weldon and Stephen Moore to launch a US equity franchise for the firm.

'The investment records of Cormac (pictured) and Stephen speak for themselves, as does the scale of the assets they manage. So we will all be very pleased to welcome them to Artemis,’ Artemis senior partner Mark Tyndall gushed.

Threadneedle, in turn, appointed Diane Sobin as head of US equities.

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One of the defining themes of the first half of 2014 was merger & acquisition activity and F&C set the ball rolling by announcing it was in talks with BMO Financial Group, a division of Bank of Montreal.

The pair thrashed out a £708 million deal with F&C changing hands in May. The transaction came after Edward Bramson (pictured) stood down as F&C chairman last year.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

On this occasion a number of UBS employees found out their self-invested pension plans (Sipps) had exposure to the Madoff Ponzi scheme. Wealth Manager revealed the story after getting hold of the letter the bank sent to staff.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

And finally it came, the news the investment press had all been eagerly anticipating – which 27 funds made it onto Hargreaves Lansdown’s discounted 150+ fund buy list.

Hargreaves, founded by Peter Hargreaves (left) and Stephen Lansdown (right), chose the early hours of the first Saturday in March to reveal the funds it had struck deals with. The average management charge on these super clean funds 0.54%. High profile funds from the likes of Angus Tulloch, Richard Buxton, Leigh Harrison and Harry Nimmo appeared on the list.

Hargreaves' head of research Mark Dampier said he was pleased with his firm’s effort: 'Our investment team devotes over 30,000 hours a year to researching fund managers to identify the best in the market.

'The core investment principles which underpin our research process ensure that only the best funds make it onto the Wealth 150 and Wealth 150+.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

As the industry fought valiantly against the growing regulatory burden, out of the blue it was presented with a golden opportunity in the Budget through a shock overhaul to pensions.

In what was dubbed the biggest pension overhaul in living memory, chancellor George Osborne said people would no longer be forced to buy an annuity on retirement.

In a detailed note in the aftermath, Bank of America Merrill Lynch said there is a significant chance a lot of this money could switch to wealth managers.

‘Typically, the default fund of a defined contribution (DC) scheme would be some kind of multi-asset or balanced product. We would guess a typical retiree might consider a less volatile version of one of these,’ the investment bank said.

‘This would reward providers who have high quality multi-asset/risk managed/balanced products as well as strong brands.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

One of our biggest stories of the year was news of an impending courtroom battle between two of the largest names in wealth management over the recruitment of a team in Leicester.

The High Court drama between Brewin Dolphin and Charles Stanley featured allegations of a cover up, secret ‘recruiting sergeants’ and clandestine negotiations to prise 18 people from the Leicester office of Brewin over to Charles Stanley.

The nine-point writ, seen by Wealth Manager, alleges that Brewin’s former employees breached their contracts and conspired with Charles Stanley to cause losses to Brewin’s business ‘by unlawful means’.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

There was distress at Coutts in March, as some staff learned their bonuses had been slashed by 40%. Perhaps understandable given this figure is much higher than the 15% fall in bonus payments at its state-owned parent group RBS.

‘RBS has only cut its bonuses by 15%. And for reasons we don’t understand because Coutts is only one of two divisions that made an adequate return on equity, our bonus pool for Coutts as a whole has been cut by 40%,’ an angry internal source told Wealth Manager.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

This time Rathbones swooped on Jupiter to seal the £43.5 million purchase of its private client business. Rathbones complemented the buy with the acquisition of the former Tilney London business. Rathbones carried out a £24.4 million placing to help fund the deals.

Rathbones chief executive Philip Howell described the buys as ‘excellent’ fits. ‘They demonstrate the merits of Rathbones to both clients and investment management teams, as well as our ability to capitalise on earnings-enhancing acquisition opportunities to grow our business,’ he said.

Jupiter chief executive Maarten Slendebroek (pictured) added: ‘Our private client operations have been part of Jupiter since the group was founded in 1985. However, the group has evolved to become predominantly a mutual fund provider and we believe it is in the best long term interests of our private clients for them to transfer to Rathbones, a specialist wealth management organisation.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Despite the constant warnings, it became evident that certain unscrupulous firms were willing to test the financial watchdog’s limits.

The FCA, led by Martin Wheatley (pictured) was left peeved indeed after its latest thematic review into adviser charging found a massive 73% of firms were not being clear about the cost of advice.

To add insult to injury the financial watchdog said it could take enforcement action against two firms – one wealth and one advisory – for ‘egregious’ failings.

'I am disappointed with the results of our latest review looking at whether advisers are clear with their customers on costs and services provided,' FCA director of supervision Clive Adamson said in a statement.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

April saw another headline-grabbing fund manager exit, this time in the shape of L&G manager Dickie Hodges.

The former Citywire AAA-rated manager, who had been at the firm for seven years, ran the £2 billion Dynamic Bond Trust (DBT), was also managing the Fixed Interest, Managed Monthly Income and Sterling Income funds on an interim basis.

The Dynamic Bond Trust was taken on by L&G senior fixed income manager Martin Reeves, while the other three funds will be managed by the UK institutional credit team, led by Robert Barnard-Smith. Hodges will remain employed by L&G until October.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Back in February Wealth Manager revealed the news that Woodford’s new venture was planning an income fund launch and our readers got worked up as they learned exactly how much the star manager would be charging for his new fund.

The annual charges ranged from 0.65% to 1.5% depending on the size of the initial investment.

Woodford Investment Management believes investors are getting a decent deal. ‘We are able to keep our fees low, through the use of modern technology and encouraging investors to use fund platforms, execution-only brokers and financial advice channels, rather than buying directly from us,’ commented the firm’s chief executive Craig Newman.

At the end of June it was revealed the fund had taken in a record £1.6 billion during its offer period.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Brewin dominated the headlines in May in what proved to be a busy first half for the wealth management business

The firm took the decision to ditch plans to implement the Figaro software package, introduced by former chief Jamie Matheson (pictured), across its wealth management business. The move cost the firm £32 million.

Instead Brewin will upgrade its existing internal systems and stressed that improving its IT strategy remains important to the group.

The board said it believed the decision to cease the roll-out of Figaro was in the best commercial interests of the group. Moreover, it said it remained confident that the 2016 operating margin target could be achieved through on-going business improvements.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

The ultra-competitive UK wealth management market heated up at the start of June on the entry of US wealth giant Meketa Investment Group (MIG).

Boston-based MIG, which was founded in 1978, employs around 100 people and consults on more than $270 billion for over 90 clients. The firm provides general investment consulting and advisory services on a discretionary and non-discretionary basis, with clients ranging from public, corporate, chartiable, insurance and family offices.

'London provides a platform to deepen our existing research coverage outside the Americas,' the firm’s managing principal Stephen McCourt said. 'Meketa Investment Group is well known for the depth and experience of its investment staff. We are pleased to establish a presence in Europe.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

In June Coutts shocked the industry, after Wealth Manager revealed it was conducting a suitability review dating back to 1957.

The RBS-owned private bank sent a letter out to clients in June saying it would review the suitability of all investment portfolios.

Coutts chief executive Michael Morley told Wealth Manager the trust of Coutts’ clients was its number one priority and explained the ‘review is designed to make sure that suitable advice was given and we put things right when it was not.’

He added: ‘We are proud of our new wealth management advice service and we believe it sets a standard for giving objective advice to clients, based on a comprehensive understanding of their personal assets and liabilities.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

As the first half drew to a close the Bristol-based firm went on a hiring spree.

The 10 recruits joined Hargreaves from the likes of St James’s Place and Chase de Vere, and spanned locations including London, Cardiff and Greater Manchester. They will remain in their regions rather than relocating to Bristol.

'Finding and securing the right high-quality individuals is one of the toughest tasks for any business,’ Hargreaves Lansdown’s head of financial planning Danny Cox (pictured) told Wealth Manager, and expressed confidence that the new recruits had ‘all the right skills and knowledge to excel at Hargreaves Lansdown’.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

The funds industry was dealt sad news when it emerged that Citywire A-rated Unicorn star John McClure had passed away.

McClure specialised in UK smaller companies for more than 20 years. He joined Unicorn in the summer of 2000 after spells at Granville, Guinness Flight Global Asset Management, United Friendly Assurance and Hermes Asset Management.

It was on the Unicorn UK Income fund where he really made a name for himself, returning 64.75% in the three years to the end of April, the second best performance out the 99 fund managers with a three-year track record in the UK equity income sector. Over five years he sat at the top of the peer group with a return of 256%.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

While the year started with a regional restructure at Barclays' Wealth & Investment Management arm, the bank closed the first half with news its chief executive Peter Horrell (pictured) was to depart.

Horrell will exit bank at the end of the year, after 23 years of service. He took the reins as chief executive in September 2013, having held the role in an interim basis since April that year, replacing former head Tom Kalaris.

'Pete has had an exceptional career at Barclays over the last 23 years, and most recently he has overseen the creation and implementation of W&IM’s strategy, securing investment in the business from Barclays and positioning W&IM for long-term and sustainable growth,’ Ashok Vaswani, head of personal and corporate banking at Barclays, said

‘It has made great progress on its transformation journey and the underlying business is robust and well positioned for the future.’

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

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